California law allows a taxpayer to take a credit for tax that is paid to another state if the other state and California tax the same income. There are limitations. The credit is taken on California 540, Schedule S if the same income is taxed by Calif. and another state. (Cal. Rev. & Tax. Code Sec. 18001(c))

Residents of California may claim a credit only if the income taxed by the other state has a source within the other state under California law. No credit is allowed if the other state allows California residents a credit for net income taxes paid to California.

California resident individuals or estates and trusts that derived income from sources within any of the following states or U.S. possessions and paid a net income tax to that state or U.S. possession on income that is also taxed by California may claim the other state tax credit on their California return:

California residents who are included in a group non-resident partnership, S Corp, LLC, etc., tax return, filed with the states listed above, as well as Arizona (AZ), Oregon (OR), or Virginia (VA) may also claim a credit for their share of income taxes paid to these states, unless any of these states allow a credit for taxes paid to California on the group non-resident tax return. 

Non-residents of California may claim a credit only for net income taxes imposed by and paid to their states of residence and only if such states do not allow their residents a credit for net income taxes paid to California. They may claim the other state tax credit on their Form 540NR return. Only states and territories allowed for non-residents are:

                                  Arizona               Oregon

                                  Guam                  Virginia

California non-residents who are residents of any state or U.S. possession not listed may not claim this credit.

Part-Year Residents follow the instructions for residents for the part of the year that they were a California resident and follow the instructions for non-residents for the part of the year that they were a non-resident. Their allowable credit is figured on Form 540, Schedule S. (CA Rev. & Tax. Code Sec. 17041)

The Other State Tax Credit is allowed for net income taxes paid to another state (not including any tax comparable to California’s alternative minimum tax) on income that is also subject to California tax. The credit is applied against California net tax less other credits. The credit cannot be applied against the California alternative minimum tax.

An Estate or Trust may claim a credit if it is treated as a “resident” of California and also as a “resident” of another state. For this purpose, an estate or trust is considered to be a “resident” of any state that taxes all its income, regardless of whether the income is derived from sources within that state.

A claim for credit or refund of an overpayment of income tax attributable to taxes paid to another state may be filed within one year from the date tax is paid to the other state or within the general statute of limitations, whichever period expires later.